Asda sales soar further as Walmart handed almost £3bn ahead of takeover

The UK’s third largest grocer is still awaiting approval from competition regulators to complete its £6.6 billion takeover.

Asda store (PA Wire)

Asda has revealed another lockdown-charged surge in sales over the past quarter as the grocer also confirmed that Walmart has taken almost £3 billion worth of dividends ahead of its takeover.

The UK’s third largest grocer is still awaiting approval from competition regulators to complete its £6.6 billion takeover by the billionaire Issa brothers and private equity backers TDR Capital.

The deal, which was first agreed in October, will see current owners Walmart retain a minority stake.

Roger Burnley (PA Media)

On Thursday, Asda filed its statutory results for 2020 which revealed that the American grocery giant withdrew significant dividends during the year.

Walmart received a dividend payment of £1.65 billion in cash during the year, as well as a dividend in specie – a payment satisfied through assets – worth £1.29 billion.

The confirmation came as Asda revealed a 7.3% jump in like-for-like sales, excluding fuel, for the three months to the end of March.

Roger Burnley, Asda’s departing chief executive officer, said demand was boosted by the closure of non-essential retailers during the third national lockdown.

The retailer said this particularly helped to drive strong clothing and general merchandise sales, which increased by 31% and 39% respectively.

We showed huge resilience last year in unprecedented circumstances and carried this momentum through the first quarter with strong like-for-like sales growth in many key categories, especially clothing and general merchandise

Roger Burnley, Asda

It hailed “strong demand” for outdoor furniture, BBQs and garden accessories, as customers prepared to host friends and family outside.

Asda said like-for-like food sales grew by 3.9% as the closure of hospitality continued to drive strong grocery sales.

Total digital sales were also up 88% for the quarter after the retailer rapidly grew its capacity for home deliveries during the pandemic.

“We showed huge resilience last year in unprecedented circumstances and carried this momentum through the first quarter with strong like-for-like sales growth in many key categories, especially clothing and general merchandise,” Mr Burnley said.

“Whilst the closure of non-essential retail during the first quarter helped stimulate demand, our constant focus on keeping prices low, providing great quality products and developing in-store partnerships with market leading consumer brands such as B&Q, The Entertainer and Greggs continues to resonate with customers.”